Can an NRI Transfer sale proceeds of inherited property from India to Abroad?

Yes, general permission is available to NRIs and PIOs to transfer sale proceeds of inherited property from a person living in India under the following conditions. If these conditions are met, the NRI does not have to request permission from the RBI. However, if the property has been taken over by an NRI from a person residing outside of India, the NRI must request specific permission from the RBI.

Conditions for repatriation in case of property inherited from a person living in India:

i. The amount of repatriation must not exceed USD 1 million per fiscal year

ii. The NRI must provide supporting documentation of the inherited estate and a certificate from a chartered accountant (CA) in the formats guided by the Central Board of Direct Taxes.

iii. In the event of settlement by one of his parents or a close family member (as defined in Article 6 of the Companies Act, 1956) and the settlement that takes effect upon the death of the settler, the original settlement deed and a tax clearance / No objection, a statement from the income tax authority must be submitted for the transfer

iv. If the transfer is made in more than one instalment as above, the payment of all such instalments will take place via the same Authorized Dealer.

On which account is the sale proceeds credited? Sanjay Mathur explains: “An NRA can remit an amount of up to $ 1 million per fiscal year from the sales proceeds of the acquired assets by way of inheritance and a remittance exceeding $ 1 million per financial year is subject to prior approval from the Reserve Bank of India. Accordingly, To credit such sales proceeds to the NRE accounts. ” You must, therefore, credit the proceeds to the NRO account.

What are the tax implications on the sale of inherited property?

The tax implications of the sale of real estate are the same as those applicable in the case of purchased goods.

Note: The purchase price for the calculation of capital gains will be the purchase price paid by the person who is leaving the property. The holding period to determine whether the gains are long or short term is calculated from the date of purchase by the person who has bequeathed the property.

You should also consider the provisions of the countries in which you live to determine the tax implications of inherited property.